Cyber Insurance Coverage: Everything You Need to Know
Cybercrime is a growing problem in today’s economy that cost the world around $1 trillion dollars in 2020. This figure has more than doubled since 2018 when figures closer to $600 billion dollars in losses were reported. As more businesses shift to remote work and online operations, criminals have more opportunities than ever to wreak havoc on unsuspecting companies and individuals. While businesses can take preventative measures to decrease their risks of being targeted, none of these methods are foolproof, and it’s impossible to eradicate all threats. Thus, many businesses, especially those in the real estate and title industry, are investing in cyber insurance coverage to reduce the risk of losses.
What is Cyber Insurance Coverage?
Cyber insurance coverage is a relatively new concept that offers protection from cybercrime to businesses of all sizes. Essentially, a cyber insurance policy is a way to reduce a company’s liability after a cyber attack. It’s comparable to general liability policies that most businesses have depending on requirements, but it caters specifically to cybercrime. Investing in cyber insurance coverage protects your real estate or title business.
Who Needs Cyber Insurance Coverage?
Cyber insurance coverage is beneficial to all businesses, whether Fortune 500 companies or small local businesses. This is because no business is immune to the damaging effects of cybercrime, and nearly all businesses collect some form of data from their customers that they are responsible for protecting. Whether it’s an e-mail address, social security number, or bank account number, if a cyberattack exposes this information, the business is responsible for remedying the situation.
The real estate and title industries are particularly vulnerable due to the frequent exchange of financial data via wire transfer or credit cards along with other sensitive customer data. This data makes the industry one of the biggest targets for criminals. If a cyberattack occurs, customers could sue the real estate or title company, and the end result could be catastrophic.
What Does Cyber Insurance Cover?
Before purchasing cyber insurance coverage for a real estate and title business, keep in mind that there are varying levels of coverage and certain stipulations. The specifics of coverage will largely depend on the insurance company and your policy, so be sure to read the fine print before agreeing to coverage. Generally speaking, most cyber insurance policies cover the following:
Data Breaches
Data breaches are a common occurrence for businesses in today’s tech-savvy world, and those in the real estate and title industry are prime targets. This is partly due to the frequent digital transmission of sensitive financial information as well as documents. Even worse, cybercriminals often assume real estate and title companies have the financial means to provide large sums of money in response to ransomware attacks.
Cybercriminals can access sensitive information by using various methods, but regardless of attack type, the end goal is to receive confidential information. This may include trade secrets, confidential client information, financial information, driver’s licenses, social security numbers, and/or passwords, any of which can result in identity theft and worse.
While any data breach can cause financial loss to a company, it also makes them responsible for client information exposed during the breach. Liability can mean offering credit monitoring services and/or paying additional costs or damages resulting from the breach. Agencies may also pay fees associated with client-initiated individual and class action lawsuits. Cyber insurance coverage helps businesses with these costs, which can be extensive.
Reimbursed Business Interruption Losses
Some forms of cyberattacks can disable a business’s website, app, or social media platforms so that doing business is impossible. Remedying the situation can be time-consuming and costly, and businesses experience a loss of profit while their systems are down. Most cyber insurance policies include reimbursement for these losses and may also cover changes in operational costs that result after the cyberattack,
Cyber Extortion Reimbursement
Malware and ransomware attacks involve holding data, websites, or entire systems hostage until a business pays a large sum of money to have it released. This can put a strain on businesses, particularly small real estate and title companies. Cyber insurance policies often include cyber extortion coverage and will help cover the costs.
What Are the Benefits of Cyber Insurance Coverage?
The greatest benefit of cyber insurance coverage is undoubtedly its financial coverage in the event of a cyberattack. In addition to financial assistance, cyber insurance can also assist with matters like notifying customers of a breach, recovering data, repairing damaged systems, handling legal fees, and aiding in repairing the identities of customers whose identities were compromised. These matters can be time-consuming and difficult to navigate, particularly for small businesses with a large customer base. Many policies are also customizable so that businesses, like real estate and title companies, can create a plan that includes coverage specific to their customers or industry.
What Are the Downsides of Cyber Insurance Coverage?
When it comes to real estate and title companies, cyber insurance coverage is a solid investment, but it is not a solution to all cyber security concerns. Prevention is still key, and a business should not decrease their focus on cyber security measures simply because they are insured through a cyber insurance policy.
It is equally important to educate employees about safe practices, keep software updated, and use anti-virus software. However, despite careful attention to preventive measures, some cyber threats, such as ransomware or brute-force attacks, can be difficult to prevent. Cyber insurance coverage is, therefore, a positive step toward ensuring your business will not experience costly damages as a result of cybercrime.
No perfect solution to the cost of cybercrime exists, however. And cyber insurance coverage only goes so far, with coverage and payouts limited to the details of your policy.
For real estate and title companies, for example, certain vulnerable areas of business may not be covered by this type of insurance. Some policies don’t cover wire transfers and other digital financial exchanges that these industries frequently rely upon or coverage is limited. Unfortunately, financial fraud is rampant, and if your cyber insurance doesn’t offer protection for these transactions, your business may have an uphill battle.
For real estate and title companies, the best way to gain full protection is to pair cyber insurance with a secure, digital platform that caters to these particular industries. Paymints.io meets the needs of top real estate and title companies and offers the same high-level security and encryption as banks.
Want to learn more about how paymints.io can streamline and protect financial transactions? Schedule a demo today to get started.
